<p>The study empirically explores the mediating role of moral awareness in the relationship between moral reasoning and ethical performance in local governments in Wakiso district, Uganda. Unlike previous research which relied heavily on agency, public choice, and deterrence theories to examine ethical performance, this study builds on Rest's Theory of Moral Development and Complexity Systems Leadership Theory. A sample size of 435 respondents drawn from a population of 1,136 technical staff and local leaders was employed in the study. Data analysis was performed using SmartPLS software. The study findings reveal that moral awareness partially mediates the relationship between moral reasoning and ethical performance in Local governments. Therefore, the study recommends that elected leaders and technical staff should develop principled reactions and prescriptive values that inspire individuals to be mindful of transaction costs, trust, and conflicts of interest in the process of delivering services in an ethical manner . Likewise, leadership grounded in the ethics of care and justice creates an enabling environment that enhances accountability among technical staff and local government leaders.</p>